8.5 Popular Performance Appraisal Models

Josie Olaveson

8.5 Popular Performance Appraisal Models

360 Feedback

The 360º Feedback model seeks to create unity in the workplace through multi-source assessments. The model achieves this through offering different perspectives on a person’s skills, behaviours, abilities, and performance, as well as alleviating the biases often found with single-source assessments. The model also provides the opportunity for individuals to rate themselves as well as others.

The 360º Feedback model has evolved significantly over the years, as employment trends and standards have changed. Empowerment in the workforce, a desire to offer employees evaluations beyond annual reporting, and an increasingly competitive job market have forced the 360º Feedback model to evolve to become even more frequently adapted by companies seeking to improve their assessment and Human Resources systems (Fleenor & Prince, 1997). While the 360º Feedback model is a relatively malleable theory and can therefore be changed to suit each business’s needs, there may be more changes in the future. Digital workforces, where all assessments and feedback would be provided virtually, would need to be implemented most likely via specific software built to support the 360º Feedback model.

The 360º Feedback model is based on the principle that feedback on a situation is different depending on people’s specific perspectives. All perspectives must be evaluated to have a well-rounded assessment. It is a form of multi-rater feedback where feedback is collected from multiple sources to understand how people within an organization are functioning (Tee & Ahmed, 2014). This feedback model is also based on data and data-based feedback principles. Specifically, David Nadler wrote a book about data-based methods of feedback and how it contributed to the development of the organization, and the concept of using data to conduct assessments in the workplace emerged (Hedge et al., 2001).

There are several benefits that this model provides to both workers and employers.

It demonstrates the differences between how workers see themselves and how others see them, which increases workers’ self-awareness and allows them to make improvements to their performance (McCarthy & Garavan, 2001).
It helps motivate employees as an appraisal tool. Workers and employers can meet to discuss the goals or objectives that are being evaluated. Workers may become more motivated to increase their productivity and performance as they are not only being evaluated by their employers, but also by themselves and their peers (McCarthy & Garavan, 2001).
It focuses on methods over outcomes, which allows workers to focus on improving the quality of their work rather than the result.
The 360º Feedback model offers insights to the productivity and the methods that workers use to conduct their work.
It gives managers insights into how the employee views themselves and their work.

The 360º model makes contributions in all sectors when running results to generate information. For example, when running a report building on workplace sustainability, the results can contribute to facilitating organizational culture and generate outstanding feedback to excel company needs.

Management by Objectives (MBO)

Peter Drucker developed Management by Objectives (MBO) whereby executive management discussed organizational goals and set objectives for employees based on those goals to be evaluated upon completed of the goals and objectives.

The theory behind MBO is basic. The theory states that employees who participate and have input into designing their objectives will feel more valued by an organization. In turn, they will be more adept to fulfill the objectives and contribute to the success of the organization. The theory hypothesizes that allowing employees to participate in goal setting enhances participation, commitment, and loyalty among employees (Gordon, 2022). The process of Management by Objectives can be described in five steps.

Senior management discusses their business goals for a particular time and then lists several objectives based on their goals.
Senior management announces company objectives to their employees. Employees review the company objectives, discuss and recommend amendments, and determine a plan that will nurture their ability to reach their objectives.
Management monitors employee progression toward the agreed upon objectives and assists where needed.
When the business cycle is complete, management and employees talk about how well the objectives were met through an evaluation process. During this process, management will compare what the employee completed and compares it to the initial agreement performance agreement.
Employees are recognized and rewarded with raises, bonuses, promotions, or new responsibilities based on how they performed.

The focus of this theory is centred around rewards, rather than punishment. Therefore, it requires management to provide unwavering support to their employees (Gordon, 2022). If results are not met after evaluation, managers attempt to take corrective action to motivate employees and modify objectives as needed. For this theory and management style to be successful, objectives need to be specific, measurable, achievable, relevant, and time-bounce, otherwise known as “SMART” (Miller, 2021).

Advantages and Disadvantages

Management by Objectives has several advantages. Some of the advantages include an enhanced understanding of tasks and duties by employees, a reduction in ambiguity around task responsibility, increased communication within the organization, increased employee focus, motivation, and job satisfaction, individualized results expectations, and alignment of effort toward company goals.

However, MBO has been the subject of criticism for a few reasons. Some of the disadvantages of MBO include poor stimulation to innovate, ignorance of the environment and the resources available to complete the goals, polarization between people and departments who are not motivated to assist beyond their own goals, misplaced importance given to goal setting rather than the completion of those goals, the time consuming nature of implementation and maintenance, and the inability to identify and quantify all objectives necessary for organizational success (Communication Theory, n.d.).

Project Management

Despite its criticisms, MBO has been a key foundation to Project Management today and challenges some of the more traditional planning processes (D’Entremont, 2012). MBO helps Project Managers move away from decisions being made strictly by management. Instead, it promotes including the entire organization in the planning process. Also, MBO helps Project Managers focus on the larger picture, instead of getting lost in the small details. Ultimately, MBO improves organizational communication and allows management and employees to collaborate on obtainable objectives to maximize resources and obtain optimal results (D’Entremont, 2012).

Human Resources

Human Resources could be responsible for establishing the company objectives and strategies through facilitation with management and employees. They would be responsible for conveying the strategy to the organization to ensure a clear understanding and idea of what success is to the organization, and how it will be measured. Human Resources would play a major role in supporting the organization to identify the company culture.

Human Resources may be involved in training management and then the employees in the MBO approach. They would design the forms used to design the goals and the evaluation forms. Human Resources may assist the management team in setting up the goals with the employees. An important step in MBO is the monitoring and evaluation of the performance and the progress of the employees. Human Resources, along with management, or perhaps independently, may provide the monitoring and evaluation processes.

Human Resources would follow through with the same processes and steps for projects within the organization by training the Project Manager and team in the MBO approach, providing the forms to set up the goals and objectives, assisting with monitoring progress throughout the project, and completing evaluations upon completion of the project.

“8.5 Popular Performance Appraisal Models” from Human Resources Management – 3rd Edition by Debra Patterson is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.

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